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20 December 2018, Gateway House

A world of uncertainties & unease

Speakers at the seventh Atlantic Dialogues, held in Morocco earlier this month, discussed what the challenge to western dominance and China’s expansionism meant for their political and economic future

Director, Gateway House

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The seventh edition of the Atlantic Dialogues was organised by the Policy Centre for the New South from 13 to 15 December at Marrakesh, Morocco. The venue was the legendary La Momounia Hotel, famous for the elegance of its architecture, matched only by the warmth of its hospitality.

As with most conferences on the state of international affairs the discussion bounced between mocking the uncertainties created by the shenanigans of one man, President Donald Trump, and the unease generated by one country, the predatory economic and territorial aggressiveness of China.

Star guest speaker, former American Secretary of State, Madeleine Albright bemoaned the harm done to American democracy and soft power by Trump’s twitter finger. Although she did critique the unfair trade practices and theft of intellectual property by China, Ms Albright’s principal preoccupation remained the threat posed to Europe by a resurgent Russia.

I was invited to participate in a plenary discussion titled ‘The Unmaking of the American-led World Order’. My co-panelists from the U.S., UK and France were concerned about the challenge posed to the West’s dominance by the changes in the global economy, which was not surprising: they framed it as the breakdown of a “rules-based order”.

I made the point that since the weight of economic growth had tilted sharply eastward, it was to be expected that an order, designed to address the destruction unleashed by the Second World War in Europe, would lose relevance. That American-led order had not been either global or orderly and certainly not balanced. Since it was intended to preserve western domination it did not address issues relating to colonialism and racism which afflicted large areas of Asia, Africa and South America.

This mindset of primacy was most vividly reflected in the composition of the United Nations Security Council which consisted of the so-called winners of the Second World War, namely, the U.S., UK, France and the Soviet Union. The fifth member was little Taiwan because the three western powers had rejected Communist China. India was not even considered because it was still fighting for independence from the UK. Reform of the global political institutions of governance cannot mean tinkering with the budget, but such reform has to be deep enough to meaningfully reflect the transformed global landscape. At a minimum, the Security Council must be broadened to include countries like India, Japan, Germany, Brazil, Nigeria and Indonesia to have the credibility to urgently address ongoing crises in Syria and Yemen.

I also asked whether the Bretton Woods institutions, like the World Bank and the IMF, even deserve to survive in their present dysfunctional form. Neither has had the independence to speak up on the current economic turmoil, created by protectionist measures imposed by the U.S. outside the framework of the World Trade Organisation, and in many instances, followed by the Europeans.

The same objections apply to the selective use of sanctions against countries, such as Iran, whose politics are not acceptable to the U.S. Especially galling are the secondary sanctions which force countries like India to curtail the import of oil from Iran or of defence equipment from Russia because the global financial transactions are dominated by the dollar and flow through institutions, such as SWIFT. It’s preferable for developing countries to have a plurality of currencies and institutions that control monetary flows.

While the survival of NATO was discussed in more depth by another panel, I did point out that the out-of-area operations of NATO in places like Iraq and Afghanistan had eroded its claim to be a defensive organisation. Both missions had arguably been failures while also destabilising the region. But NATO’s continued relevance was threatened more by the dissonance between Trump and the European member countries as well as the on-again off-again efforts, led by France, to create a separate European army.

It was also evident that European countries were preoccupied with their internal developments—the UK in the chaotic Brexit, France with the weekly protests by the disenfranchised and Germany with the erosion of Chancellor Merkel’s authority, caused mainly by the rise of right-wing anti-immigrant parties across Europe. They also had vastly differing perceptions of Russia—South and Central Europe want working relations while the UK persists in its age-old rivalry with Russia.

Since the implications of the expansion of China were a big part of the discussions there was a separate lunch meeting to consider the “Rise of China”. The lone Chinese participant spoke of China as an old civilisation which wanted only peace and harmony, a large country with a big population and so it should not be expected to change quickly. The irony of China’s transformation from a poor country to the largest economy in the world in just 40 years seemed to have escaped her.

The Americans catalogued China’s many transgressions in trade matters, including the manipulation of WTO regulations, the unfair advantages enjoyed by Chinese state-owned enterprises in tendering for projects abroad and the militarisation of the South China Sea. While the Africans and South Americans were willing to accept Chinese investment in infrastructure, they did express concern about unsustainable debt levels in their economies and the lack of freedoms and democracy in China. Privately, they also expressed impatience with western pressure to choose between the West and China, evoking the memory of being the venue for the proxy wars fought by the West against the USSR in the Cold War. But there was consensus that Trump would persist with the trade war with China and that would have negative consequences for the global economy.

I explained that India-China relations were complicated by the perceived Chinese unwillingness to settle the border, an unsustainable annual trade deficit of over $60 billion and the opacity of China’s strategic investments in India’s neighbours, capped by over $60 billion in Pakistan—a country shunned by other overseas investors.

The Africans and South Americans remain interested in fruitful relations with former European colonisers, but are no longer overawed by them. Today’s issues are immigration and refugees and their demand was for the Europeans to deal with right-wing tendencies and exclusionary attitudes, but there were no requests for aid.

Of interest to us was the release of a joint study by the OCP and Observer Research Foundation, ‘Securing the 21st Century: Mapping India-Africa Engagement’. It dealt with subjects such as agriculture, health, alternative connectivity options for Africa, financing development in India and Africa, as well as futuristic subjects such as clean energy and smart cities.

The Atlantic Dialogues were of special interest to India because of the desire for cooperation with India that the Africans and South Americans expressed.

Neelam Deo is Director, Gateway House.

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